Kingfisher board gives nod for Rs 2,000-cr issue | india | Hindustan Times
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Kingfisher board gives nod for Rs 2,000-cr issue

india Updated: Aug 27, 2011 02:01 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Vijay Mallya-led Kingfisher Airlines on Friday announced plans to raise up to Rs 2,000 crore through a rights issue. The company has a debt of Rs 6,000 crore.

The fund raising would be subject to the approval of shareholders, the company in a statement to the Bombay Stock Exchange (BSE).

Earlier this year, Kingfisher had cut its debt through a debt restructuring. The company had also issued 11.6 crore shares to a consortium of 13 banks led by the State Bank of India after conversion of compulsory convertible preference shares at
Rs 65 per share.

The company board has also amended the terms for the issue of optionally convertible debentures that were issued on January 3, the company said. "8% optionally convertible debentures of R100 each aggregating to R709 crore were issued and allotted on January 3 to certain entities who confirmed their intention to act as persons acting in concert with the promoters for the purpose of that issue," the company said in a statement to the BSE.

On August 10, the company reported an increase in its net loss for the first quarter of the current fiscal at Rs 264 crore as compared to Rs 187 crore in the corresponding period of 2010-11. Its total revenue for the quarter increased by 15% at Rs 1,911 crore over the same quarter last year. The company’s share price on Friday fell by 6.2% to close at Rs 24.

Kingfisher, along with most aviation firms has been on a receiving end for the past one year due to the high crude prices and increasing operational costs. Most companies in the sector, with an intention of capturing more market share have been slashing price, triggering a price war.

Also, the company owes Rs 208 crore to the Airport Authority of India (AAI). In a written reply to the Rajya Sabha, civil aviation minister Vayalar Ravi said Kingfisher Airlines along with Paramount Airways did not settle dues on a regular fortnightly basis. "Their dues exceeded the security deposit or bank guarantees available with the AAI," Ravi said.